Merck (NYSE: MRK) announced today that the company has received a Complete Response Letter from the U.S. Food and Drug Administration (FDA) regarding the New Drug Application for suvorexant, Merck's investigational medicine for the treatment of insomnia.

In the Complete Response Letter, the FDA advised Merck that:

*the efficacy of suvorexant has been established at doses of 10 mg to 40 mg in elderly and non-elderly adult patients;

*10 mg should be the starting dose for most patients, and must be available before suvorexant can be approved;

*15 mg and 20 mg doses would be appropriate in patients in whom the 10 mg dose is well-tolerated but not effective; and,

Commenting, Goldman Sachs analyst Jami Rubin said, "We are pushing our suvorexant launch assumption from 2014 out to 2015 based on today's news. While our estimate of $180 mn in 2014 and consensus at $145 mn do not suggest significant downside to MRK, today's news is another pipeline setback in a year that has seen tredaptive failure, odanacatib delay and – separately – biosimilar Remicade in EU with a surprisingly broad label."

On a positive note, Rubin he is encouraged by MRK's attention to capital allocation and aggressive pursuit of share buybacks.

Goldman Sachs has a Neutral rating on Merck with a price target of $50.00

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